District's High-Tech Industry Blossoms

Glanz, William, The Washington Times (Washington, DC)

The District's technology industry has grown almost 400 percent since 1994 but still remains small and overshadowed by Northern Virginia companies, according to the first report ever done of the city's tech businesses.

The report, done to measure the D.C. tech industry and released yesterday by the nonprofit civic group DC Agenda, shows the number of tech companies increased 374 percent from 70 businesses in 1994 to 332 in 1999.

The new report is significant partly because until now no group has measured the nascent industry, one that is expected to help fuel the District's economic growth, said Stephen Fuller, George Mason University professor of public policy and author of the new study.

"It's not the future of the economy, but it is a major source of potential growth," Mr. Fuller said. "The D.C. tech industry has expansion potential."

The snapshot indicates that most of the District's technology companies remain small: 62 percent had fewer than nine employees in 1999. But their presence and their growth helped offset the loss of federal jobs, which declined by 66,700 from mid-1993 to 1999.

D.C. tech companies employ about 7,200 workers - an average of 21 persons each. Intelsat, the satellite-communications provider, is one of the District's few large technology employers with about 800 workers.

By contrast, Northern Virginia's estimated 5,902 tech companies employ about 237,000 workers, according to a study by Chmura Economics and Analytics done in August for the Virginia Center for Innovative Technology.

"The District is like an incubator. It's taking one- and two-person shops and growing them into 10-person and 20-person companies," Mr. Fuller said.

In 1999, the District's tech companies contributed $1.3 billion to the D.C. economy, about 3 percent of the gross city product, Mr. Fuller said.

Most of the District's tech companies provide technology services to other businesses and the federal government. Their specialties include everything from computer repair to setting up computer networks. That is different from the software and Internet niche of Northern Virginia's tech sector.

The study also is significant because the city long has coveted tech companies. The growth has occurred seemingly with little provocation from city officials. The report shows that the District appeals to business owners because they prefer the urban setting to suburban Virginia and like the shorter commutes.

"We're optimistic [that the growth of tech companies] will continue at the pace it has been growing," said Michael Vincent Hodge from the D.C. Office of Economic Development. …

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